Dr. Norm Matloff : The Emperor Has No Clothes—There Is Not A Shortage Of STEM Workers, There`s A Glut

Nice piece by Ross Eisenbrey the other day, of the “emperor has no clothes” variety: America’s Genius Glut, NY Times, February 7, 2013

Very tightly reasoned, a compelling argument to anyone with an open mind.

On that latter score, a journalist told me just today that all of her colleagues buy into the notion of a STEM shortage. They ought to know better–the Lowell and Salzman study was done under the auspices of a very prominent DC think tank, and the NIH commission`s findings on the Dickensian status of lab scientists was published in the WP, front page, above the fold–but no, all the industry PR machine has to do is push the “Johnnie can`t do math” button, and the press responds as desired.

One of the problems is that a typical reporter who is writing a story on H-1B will be writing gasoline prices tomorrow and mortgage defaults the day after that. Most of them have no incentive to do the deep digging that would show the industry lobbyists` PR claims to be false. It wouldn`t even have to be that deep. For example, a simple call to any immigration lawyer would quickly verify the point about H-1Bs being de facto indentured servants, and the point that legal prevailing wage is typically below the true market wage for the given foreign worker (due for instance with special skill sets not being accounted for).

A note on the “indentured” status of the foreign workers: In the legal sense, an H-1B can switch employers, but in a practical sense this is either infeasible or unthinkable. By the latter I mean that if the H-1B is being sponsored for a green card, as is typically the case with the target population of current proposals (foreign graduates of U.S. schools), the worker does not dare switch jobs, as it would mean starting the multiyear green card process from scratch. But even if the worker is not being sponsored for a green card, it would usually be very difficult to get the new employer and the new visa quickly enough to avoid leaving the country.

That`s why some critics of H-1B have supported the idea of granting green cards, not work visas. If the green cards were given instantly, right after graduation, the indentured status would not occur. But as I`ve said, green cards would still have mostly the same adverse effect as H-1B. It would depress wages by flooding the labor market–the problem Ross cites would occur with or without indentured status–and worse, the impact on older (35+) American workers` job opportunities would be identical, since the vast majority of new foreign grads are young. “Green cards, not work visas” is a nice catchy phrase, but it is NOT the solution.

The wage suppression effect should be news to no one, least of all Congress. Not only is it just common sense, but it was stated in the 2001 NRC report–a report REQUESTED by Congress.

Ross mentions the unemployment rate having doubled, to which I`d add that unemployment rates aren`t very meaningful in the first place. Those who have been forced out of the field are now employed in some other profession–and thus don`t count as unemployed. Also, the independent contractors are UNDERemployed, with fewer gigs than before, at lower rates.

By the way, EPI will be running my own article in the next couple of weeks, debunking the myth that the H-1Bs tend to be “the best and the brightest.”